Plaid Study Links Account Checks to Faster Fraud Detection

Payments have spent years getting faster. Fraud detection has not always kept pace.

New August research from PYMNTS Intelligence, in collaboration with Plaid, shows that 47% of firms surveyed can’t detect suspected fraud in real time or within minutes. That is despite widespread use of sophisticated defenses: 90% use rules-based scoring before authorization, 83% use machine learning or predictive risk scoring, and 81% check payment histories.

The problem is not that companies lack fraud controls. It is that those controls were often built for a payments environment in which businesses had more time to recognize a bad transaction. Real-time payments change that equation. When settlement becomes immediate and potentially irreversible, fraud detection that arrives hours later can be operationally equivalent to no detection at all.

Nearly 6 in 10 surveyed firms (57%) report more fraud attempts than a year earlier. Incoming customer payments are considered the riskiest payment flow by 47% of firms, ahead of customer disbursements, refunds, vendor payments and internal transfers.

Time Is the New Fraud Metric in Payments

Fraud prevention is becoming less about whether a company eventually identifies suspicious activity and more about whether its systems can identify it before money becomes unrecoverable. That puts greater strategic value on information available at the moment of payment.

Payment modernization is already associated with operational gains. Ninety percent of surveyed businesses link secure bank connectivity to improved onboarding, 89% to lower payment operating costs and 85% to fewer failed or returned payments. Ninety-nine percent report at least some reduction in total operating costs from modernization, with an estimated average decline of 8%.

Yet real-time payment adoption itself remains comparatively cautious. Only 24% of firms say their fraud systems are mostly or completely adapted for real-time payments, even though 67% say growth in those transactions has increased their fraud exposure. Operational complexity, fraud concerns and cost rank as the leading barriers to wider adoption.

Read the report: Payment Protection: Why Firms Still Aren’t Real-Time Ready

Among firms verifying account ownership in real time, 60% detect suspected fraud either instantly or within minutes. Among companies that do not verify ownership in real time, just 39% detect it that quickly. Real-time verifiers are also more than twice as likely to identify fraud before funds move: 21% versus 10%.

That does not establish that account verification alone causes faster fraud detection. But it points toward an architectural advantage: Firms able to connect identity, ownership and account information directly to transaction decisions appear better positioned to compress the fraud-detection window.

And many businesses already possess much of the underlying infrastructure.

Nearly all surveyed firms have secure bank connectivity. Sixty-five percent use it for real-time account ownership verification and the same share for matching identity against bank records. Yet only 49% use secure bank connectivity to generate real-time fraud signals from account activity.

That gap suggests the next phase of payments modernization may involve getting more intelligence from existing connections rather than simply adding another fraud product.